The April lead futures on the Multi Commodity Exchange marked a high of ₹194.8 on Wednesday before seeing an intraday fall. At its peak, the contract’s gain was nearly 10 per cent in this month.

However, note that ₹195 is a resistance. This level has been blocking a rally since 2021, indicating that this is a strong barrier to break. Moreover, the chart of the continuous contract of lead futures shows that it has been oscillating between ₹173 and ₹195 since 2021.

Considering the above factors, the probability of a decline from the current level is high. The immediate support is at ₹187. Below this, the support levels are at ₹185 and ₹180.

On the other hand, if lead futures break out of ₹195, it can establish a fresh leg of rally, which can lift the price to ₹215.

Trading strategy

As the probability of a decline is high, we suggest going short on lead futures at the current level of ₹190. Place stop-loss at ₹195. When the contract slips below ₹185, tighten the stop-loss to ₹190. Book profits at ₹180.